Commissioner v. Glenshaw Glass Co.
Citations
- 348 U.S. 426
- 75 S. Ct. 473
- 99 L. Ed. 2d 483
- 1955 U.S. LEXIS 1508
About this case
From Wikipedia, the free encyclopedia
1955 United States Supreme Court case
English Wikisource has original text related to this article:
**Commissioner of Internal Revenue v. Glenshaw Glass Company **
Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), was an important income tax case before the United States Supreme Court . The Court held as follows:
Congress , in enacting income taxation statutes that comprehend "gains or profits and income derived from any source whatever," intended to tax all gain except that which was specifically exempted.
Income is not limited to "the gain derived from capital, from labor, or from both combined."
Although the Court used this characterization in _Eisner v. Macomber _, it "was not meant to provide a touchstone to all future gross income questions."
Instead, income is realized whenever there are "instances of [1] undeniable accessions to wealth, [2] clearly realized, and [3] over which the taxpayers have complete dominion."
Under this definition, punitive damages qualify as "income" -- even though they are not derived from capital or from labor.[1]
Facts
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Two factually distinct cases were consolidated because they presented the same issue.
- In one case, the defendant Glenshaw Glass Company had won an award of punitive damages in an antitrust lawsuit . The defendant did not declare this award as income or pay taxes on it, claiming that it was not subject to taxation. The Internal Revenue Service brought suit to collect the tax .
- In another case, William Goldman Theatres, Inc. neglected to report punitive damages as income. Again, the Internal Revenue Service sued to collect the tax .
Opinion of the Court
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The Supreme Court, in an opinion by Chief Justice Earl Warren , held that the award of treble damages was taxable income.
In the opinion, Warren pointed out that the language of section 22(a) (the predecessor of current section 61(a) [2] ) was employed by Congress in order utilize "the full measure of its taxing power," as provided for under the Sixteenth Amendment . Essentially, Congress, in enacting section 22(a), intended to tax all gains except those specifically exempted.
The Court then held that the amounts received by the taxpayers in this case were "instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion."
This three-part "test" for determining income is broader than the earlier test employed by the Court in _Eisner v. Macomber _,[3] and is to this day the preferred test for identifying gross income.
See also
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References
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↑ Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430-31 (1955).
↑ _Eisner v. Macomber _, 252 U.S. 189 (1920)
Further reading
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- Dodge, Joseph M. (2002). "The Story of Glenshaw Glass: Towards a Modern Concept of Gross Income" . In Caron, Paul L. (ed.). Tax stories: An in-depth look at ten leading federal income tax cases. New York: Foundation Press. pp. 15–52 . ISBN 1-58778-403-3 .
- Donaldson, Samuel A. (2005). Federal Income Taxation of Individuals: Cases, Problems & Materials. St. Paul, MN: Thomson/West. pp. 49–52. ISBN 0-314-14429-3 .
External links
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- Text of Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955) is available from: CourtListener Findlaw Google Scholar Internet Archive (docket files) Justia Library of Congress OpenJurist
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How courts have described this case
Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.
- holding that all \accessions to wealth\ must be included in gross income unless a specific exclusion applies
- holding that gross income includes any accession to wealth, clearly realized, over which the taxpayer has complete dominion
- holding that “money received as exemplary damages for fraud or as the punitive two-thirds portion of a treble-damage antitrust recovery must be reported by a taxpayer as gross income under s 22(a) of the Internal Revenue Code of 1939”
- holding that recovery of punitive damages for fraud and antitrust violations was gross income under section 22(a) of the Internal Revenue Code of 1939, 53 Stat. at 9, because the taxpayer had complete dominion over the recovery
- Explaining that “it is well settled that receipt of a loan is not income to the borrower.”
- stating that gross income includes all accessions to wealth that are clearly realized and under the control of the taxpayer
Source: CourtListener parenthetical corpus (CC0).
Judges: Warren, Douglas, Harlan
Read full opinion on CourtListenerSourced from CourtListener / Free Law Project (CC0).
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.